A middle-aged man dreaming of the day when he can stop begging for scraps and write for a living.

Tuesday, September 30, 2008

Wall Street and the government bailouts

I have no problem with the government buying bad debt. There are things that the government can and should do that the market cannot, particularly when it comes to the well being of citizens. The government is placed in the position of authority, given oversight into the affairs of its people.

Markets are well-suited to carrying out the specifics of what has to be done, but they are not good overseers of the public welfare. Businesses generally have one goal: to make money. Serving the public is the way they're supposed to make money. If you give them leeway they'll screw over the public in order to make more money. They do it every single time. So my idea of a good bailout bill for the government? Buy out the loans to the banks so people are allowed to stay in their homes without allowing the banks to collect on the exorbitant interest rates that are forcing people out of their homes in the first place. There's no reason to reward the banking industry for its predatory lending practices.

I've said it before and I have no doubt I'll say it again: regulation is the key to a healthy economy. I know that businesses chafe under government rules, because there's so much more money they could be making without it. Cutting corners, disregarding safety measures and predatory business practices are all time-honored methods of maximizing profits. While businesses are more successful when they take the long view in serving the public good, that never stops the entrepreneur who is more focused on the bottom line. The amount of damage such businesses can do often have repercussions that last a generation or more. It is not enough to sit back and passively allow the market to "correct itself," because we'll all starve before that happens. We must take an active role in keeping our markets honest and ensuring fair businesses practices across the board.

I do not favor using the government as a bludgeon to punish businesses. We need businesses to flourish. What we do not need is deregulated businesses, particularly when we have historical examples like the Great Depression to help us figure out what can go wrong. When the government abdicates its responsibility to perform oversight, it's the people who suffer.